Three Whistleblowers Accuse BNY and State Street of Overcharging Customers for Currency Trades

Employees of BNY Mellon and State Street have blown the whistle on their former employers alleging that the two banks systematically overcharged pension funds and other clients for currency trades.

Grant Wilson, a former BNY Mellon currency trader, and former State Street currency employees, Peter Cera and Ryan Gagne, have provided the Securities & Exchange Commission with original information regarding the companies’ currency-trading operations allegations including emails and other internal bank documents. In addition, the whistleblowers are assisting the SEC with the related civil investigations against BNY and State Street. In exchange for their cooperation and assistance, the SEC will pay Messrs. Wilson, Cera and Gagne up to 30% of the assessment against BNY Mellon and State Street pursuant to the Dodd-Frank Act.

Messrs. Wilson, Cera and Gagne also have a financial interest in a civil suit filed against State Street in 2009 by California state prosecutors. Observers surmise that the whistleblower group could collect up to 33% of the estimated $200 million in damages sought in that case. The whistleblowers were not represented by Milberg LLP.

The Dodd-Frank Act encourages whistleblowers to report corporate fraud by offering financial incentives and protection from retaliation. Whistleblowers who provide original information to the SEC qualify for a financial reward between 10% and 30% of any financial recovery greater than $1 million by the SEC from a targeted publicly traded corporation. In order to be considered original, the information must be derived from the whistleblower’s independent knowledge or analysis and cannot be known to the SEC from any other source.

The Dodd-Frank Act also provides whistleblowers with a private right of action in federal court to establish unlawful retaliation by their employers. Dodd-Frank also extends anti-retaliation protection to whistleblowers who report information to the Commodity Futures Trading Commission and expanded the existing anti-retaliation provisions under the Federal False Claims Act.

This entry was posted on Tuesday, February 14th, 2012 at 6:57 pm and is filed under WT Blog.
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